Construction Frequently
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Please check the following FAQ's below to find the answers to common questions

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Preliminary Notice FAQ

A Montana Notice of Right to Claim a Lien is a letter sent by a contractor, laborer or supplier to the property owner at the start of a construction project. 

Regardless of your role in a project, you are required to serve a Notice of Right to Claim a Lien on the owner within 20 days of first providing labor or materials.³ You must also file the notice with the county recorder within 5 days of serving it on the owner.

Since a Notice of Right to Claim a Lien is usually required in Montana, not sending one may be fatal to your claim.

Intent To File FAQ

A Montana notice of intent to lien is sent before the filing of a mechanics lien becomes necessary. Although only a number of states require that this notice be sent, many construction participants send a notice of intent to lien as an uncostly way to have payments for invoices settled.

A notice of intent to lien is not required in Montana, but it may be best to send one anyway as a reminder to the property owner that payment is due.

To give the property owner enough time to settle payments, send your Montana notice of intent to lien at least 10 days before your intended date of filing a mechanics lien.

Since a notice of intent to lien is not required in Montana, not sending one will have no effect on your claim.

Mechanics Lien FAQ

A Montana mechanics lien is an effective tool that helps make sure you will be paid for the construction materials and/or labor you supplied. It is a legal claim that guarantees payment for contractors.

This means that if you have a valid mechanics lien on a project you worked on in Montana and weren’t paid for your work, you have the right to enforce the lien through a lawsuit. This enforcement action can either prompt the client to settle or force the sale of the property. The proceeds of the sale will be used to settle your unpaid bill.

With a valid Montana mechanics lien, you have an interest in the improved property. When a mechanics lien is filed on the property you worked on, the property becomes collateral for uncollected payments.

A Montana mechanics lien may be filed by parties who furnish labor, services or materials for the improvement of real estate as part of a contract, which may be outright or implied.¹ 

The following are activities considered work of this nature: excavation or fill work, construction or installation on, above, or below the surface of land, demolition, repair, remodeling, or removal of structure, landscape operations, surface or subsurface testing, preparation of plans or surveys or drawings for any change in the physical condition of real estate whether or not the change in the real estate is undertaken.

A Montana mechanics lien should be filed within 90 days of last providing labor or materials, or within 90 days of the property owner filing a Notice of Completion.²

A Montana mechanics lien must be enforced within 2 years of filing. The lien is effective during this period.

According to state law, a Montana mechanics lien must bear the following pieces of information:

  • the name and address of the person claiming the lien
  • a description of the real property against which the lien is claimed sufficient to identify it
  • the name of the contracting owner
  • the name and address of the party with whom the person claiming the lien contracted to furnish services or materials
  • a description of the services or materials provided
  • the amount unpaid for services or materials or, if no amount is fixed by the contract, a good faith estimate of the amount unpaid, designated as an estimate
  •  the date on which the services or materials were first furnished; and
  • the date on which the services or materials were last furnished
  • a declaration that a notice of a right to claim a lien was given to the contracting owner or an explanation of why the notice was not required.

You don’t need to be licensed for the work you did in a project to file a mechanics lien in Montana.

Montana has no legislatively designed lien waiver forms, so any such form may be used.

You should cancel a Montana mechanics lien upon satisfaction of payment.

Pay-if-paid clauses appear to be unenforceable in Montana.

It is not clear if pay when paid clauses are enforceable in the state.

References:

https://leg.mt.gov

Montana Construction Lien Law

¹ Montana Code Section 71-3-523

² Montana Code Section 71-3-535

³ Montana Code Section 71-3-531

 

Handle.com provides answers to Frequently Asked Questions (FAQs) to contractors and others who are seeking information regarding preliminary notices, intent to file, mechanics lien, and other construction questions. These are provided for informational purposes only, and we cannot provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defenses, options, selection of forms or strategies.

Montana documents

Mechanics Lien

Still chasing payments on a construction project? File a Mechanics Lien on the project to recoup unpaid labor and materials.

Preliminary Notice

Secure rights to file a lien and notify parties you’re on the job. Not filing a preliminary notice may result in lost revenue in case of a delinquent client.

Release of Mechanics Lien

Finally got paid? Issue a release of mechanics lien to resolve the payment dispute with finality.